David A. Wilton

The determinants of contract length: An empirical analysis based on Canadian micro data

Abstract Recent theoretical work on the determinants of wage-contract length focuses on inflation uncertainty as an explanatory variable additional to the more traditional variable of transactions costs. This paper analyses the empirical determinants of contract duration using a large sample of contract data and confirms the conclusions reached in the theoretical literature.

A Microeconometric Analysis of the Canadian Wage Determination Process

The objective of this paper is to analyse the Canadian wage determination process using micro-data derived from individual union wage contracts, signed during the 1966-1975 time period. Conventional wage studies based on aggregate time series are subject to a number of important econometric criticisms arising from their failure to specify correctly the institutional features of the labour market (such as multi-year contracts, deferred increments and the variability of the bargaining calendar). Use of micro-data prior to aggregation not only avoids most of these institutional econometric problems, but also makes possible a precise investigation of several important theoretical and policy issues. In particular, it is possible to separate expected inflation from uncompensated past inflation and to investigate the impact of each type of inflation on the wage determination process. We also pay attention to the changing structure of the Canadian labour market and to the possible impact of the 1971 Unemployment Insurance Act (UIA) revision on Canadian wage inflation.

Determinants of Negotiated Wage Increases: An Empirical Analysis

During the past decade, a considerable amount of econometric research has been devoted to the explanation of movements in wages. Most empirical studies have used a basic disequilibrium model, first suggested by Philips, in which the change in money wage rates is related to the level of unemployment. Statistical problems are briefly discussed in section 1 of the paper, and the main implications of our study for the aggregate Phillips Curve are given in Section 3.

Travel to Canada: the role of Canada's immigrant populations.

The effect of Canadas immigrant populations on the annual flow of visitors to Canada is investigated. A simple utility-maximizing model of the travel decision motivates the role of immigrant populations in the aggregate demand equation for visits to Canada. The model implies testable hypotheses: price and income elasticities differ by purpose of trip. Using time-series cross-section data on 22 OECD countries an empirical demand model is estimated. Demand is measured by both the number of visitors and person-nights and separate equations are estimated for four subcategories of ‘purpose of trip’. Immigrant populations are found to have a strong influence on the annual flow of foreign visitors. It is estimated that the present value of the stream of spending by foreign visitors attributable to an additional immigrant is approximately

The Sensitivity of Quarterly Models of Wage Determination to Aggregation Assumptions

4550 in 1996 dollars. In accordance with the models predictions, price and income elasticity estimates are greater for vacationers than for those visiting family and friends.

The Effect of settlement stage on negotiated wage settlements in Canada

In his A.E.A. Presidential Address, Tobin points out that due to the continuing controversy over the concept of a stable Phillips curve, the institutional features of the labour market have been largely ignored. Hence, the purpose of this paper is twofold: (1) to present an analytical framework for the empirical investigation of these institutional labour market features, and (2) to present some empirical results demonstrating the gravity of the problem.

Structural Shift with an Interstructural Transition Function

This paper analyzes the effect of the particular stage of wage settlement on the negotiated wage increase, using micro data on Canadian labor contracts between 1966 and 1975. The sample data base was divided into direct first-stage bargaining, mediation-conciliation, and work stoppage/arbitration, and structural wage equations were estimated for each set of data. The results indicate that as negotiations move from direct bargaining to work stoppage, labor market conditions, measured by a vacancy rate, become less important as an explanatory variable and price catch-up becomes more important.

A microeconomic analysis of wage determination in the Canadian public sector

The purpose of this paper is to suggest a simple model for the regression problem of a known switching date in structures which consumes several intervals of time to complete the shift. This model, then, permits a smooth transition from an old to a new structure, and is easily tested by employing standard t and F tests. Before presenting the model, a few examples of the type of economic problems for which this model is applicable will be discussed. First, the establishment of an Incomes Policy may take a number of time intervals to affect a change in the underlying structure (e.g, inflation expectations). Or, the price response of exporters and importers to a revaluation of a fixed foreign exchange rate may not occur simultaneously, but rather may be partially absorbed in profit margins over a transition period. Finally, corporation adjustments to a new industrial policy may be extended over a number of years. As illustrated in the present paper, the model is successfully applied to a structural shift problem of this latter variety arising from the signing of the Canada-U.S. Automotive Agreement.

The Impact of the Anti-Inflation Board on Negotiated Wage Settlements: A Reply

Abstract Using cross-section, micro wage rate data for the period 1967–1975, this paper analyses the extent to which price expectations, price ‘catch-up’, and labour market conditions affect the rate of change of base wage rates in the Canadian public sector. The results indicate that both price movements and labour market conditions do influence base wage rates in a manner that is not radically different from that in the private sector. The paper also explores the importance and significance of these factors when the data are disaggregated according to jurisdiction and method of contract settlement. The final section of the paper is devoted to an exploration of wage spillovers within the public sector and between the public and private sectors.

The Empirical Sensitivity of the Phillips Curve

to gauge changes in employment opportunities, as measured by quantity of newspaper advertisements. Perhaps this measure does accurately reflect changes in employment opportunities from one period to the next for a given region. However, comparison of index values across regions is meaningless, unless the number of vacancies was identical in all regions in 1969. The job vacancy survey data compiled by Denton, Feaver, and Robb (1975) indicate that this is unlikely.2 Consequently, variation across regions in labour market conditions is probably inaccurately measured by ACSW. Since the measurement error occurs in one of the explanatory variables for their regression model, in principle it should result in estimation bias, thus calling into question the validity of their reported results (Johnston, 1972, 281-2). In a preliminary version of this paper, which was presented at the 1978 meetings of the Canadian Economics Association, the authors had results based not only on the regionalized help-wanted index, but also on regionalized job vacancy rates derived from the job vacancy survey data compiled by Denton et al. Given the conceptual problem associated with the regionalized help-wanted index in the context of this study, it would seem preferable to base conclusions on the estimates obtained using the job vacancy series.